“What makes a decision great is not that it has a great outcome. A great decision is the result of a good process, and that process must include an attempt to accurately represent our own state of knowledge. That state of knowledge, in turn, is some variation of ‘I’m not sure.’”

Scenario planning is a productive skill to develop in decision making because:<ul><li>It reminds us that the future is uncertain, giving a more realistic view of the world</li><li>It prepares us for how to respond to different outcomes that might respond from our initial decisions</li><li>Anticipating the range of outcomes keeps us from unproductivity regret</li><li>By mapping out potential outcomes & probabilities, we are less likely to fall prey to resulting or hindsight bias.</li></ul>

Scenario Planning 

“Improving decision quality is about increasing our chances of good outcomes, not guaranteeing them.”

“In most of our decisions, we are not betting against another person. Rather, we are betting against all the future versions of ourselves that we are not choosing.”

Even when people experience the same event at the same time, if you ask them about it, you will often get two very different accounts about what happened.That’s because the way we interpret the world is not only a function of the objective experience but includes how we see and choose to understand the world.

The Rashomon Effect

A bet is a decision about an uncertain future. Thus, most of the decisions in your life – switching jobs, choosing a partner, selecting your field of study, not doing something – are bets.They’re choices that you make in the face of an uncertain future.

All Decisions Are Bets

People are better at recognizing biased reasoning in others but are blind to bias in themselves. <ul><li>Being smart can actually make bias worse. Blind-spot bias is worse the smarter you are.</li><li>Being smart and aware of your capacity for irrationality alone doesn’t help you refrain from biased reasoning.</li></ul>

Blind-Spot Bias

This is how we think we form our beliefs:<ul><li>We hear something</li><li>We think about it and then determine whether if it is true or false</li><li>We form our belief</li></ul>This is how we actually form our beliefs:<ul><li>We hear something</li><li>We believe it to be true</li><li>Only sometime later, if we have the time or the inclination, we think about it and then determine whether it is true or false</li></ul>Our pre-existing beliefs influence the way we see the world and the way we make decisions.

How We Form Our Beliefs

“Thinking in bets starts with recognizing that there are exactly two things that determine how our lives turn out: the quality of our decisions and luck. Learning to recognize the difference between the two is what thinking in bets is all about.”

It is important to have a go-to group of people with a common interest in thinking in bets.The characteristics of a good group to practice truth-seeking with:<ul><li>A focus on accuracy (over confirmation), which includes rewarding truth-seeking, objectivity, and open-mindedness within the group</li><li>Accountability for which members have advance notice</li><li>Openness to a variety of ideas</li></ul>Once we are a part of a group that regularly reinforces exploratory thought, the routine becomes reflexive, running on its own.

Thinking In Bets: The Buddy System

Resulting means judging the quality of a decision based on the quality of the result.Our tendency is to equate the quality of a decision with the quality of its outcome. The prevents us from accurately assessing the quality of our decisions and the role of luck in the outcomes we achieve.

Resulting

<ul><li>Express uncertainty: If we start by making clear our uncertainty, our audience is more likely to understand that the discussion held does not always have to be about right or wrong but about openness to different perspectives.</li><li>Lead with assent: Everyone likes to be affirmed. Avoid the language of no. Use ‘and’ more than you use ‘but’ in an expression of possibly polarizing ideas</li><li>Ask for temporary agreement: Whenever one is offloading emotion to us, we can ask them if they are looking to vent or if they are looking for advice</li><li>Focus on the future,  rather than rehearsing what has happened.</li></ul>

How To Engage In Truth-Seeking

Life is not like chess. Chess contains no hidden information and very little luck.Life is more like poker. You could make the smartest, most careful decision and still have it blow up in your face.

Life is Poker, Not Chess

Learn to evaluate life and business choices via the lens of Opportunity Costs

problemsolving

Problem Solving

business

Business

moneyandinvestments

Money & Investments

What Is Opportunity Cost

Wall Street Journal bestseller! Poker champion turned business consultant Annie Duke teaches you how to get comfortable with uncertainty and make better decisions as a result. In Super Bowl XLIX, Seahawks coach Pete Carroll made one of the most controversial calls in football history: With 26 seconds remaining, and trailing by four at the Patriots' one-yard line, he called for a pass instead of a hand off to his star running back. The pass was intercepted and the Seahawks lost. Critics called it the dumbest play in history. But was the call really that bad? Or did Carroll actually make a great move that was ruined by bad luck? Even the best decision doesn't yield the best outcome every time. There's always an element of luck that you can't control, and there is always information that is hidden from view. So the key to long-term success (and avoiding worrying yourself to death) is to think in bets: How sure am I? What are the possible ways things could turn out? What decision has the highest odds of success? Did I land in the unlucky 10% on the strategy that works 90% of the time? Or is my success attributable to dumb luck rather than great decision making? Annie Duke, a former World Series of Poker champion turned business consultant, draws on examples from business, sports, politics, and (of course) poker to share tools anyone can use to embrace uncertainty and make better decisions. For most people, it's difficult to say "I'm not sure" in a world that values and, even, rewards the appearance of certainty. But professional poker players are comfortable with the fact that great decisions don't always lead to great outcomes and bad decisions don't always lead to bad outcomes. By shifting your thinking from a need for certainty to a goal of accurately assessing what you know and what you don't, you'll be less vulnerable to reactive emotions, knee-jerk biases, and destructive habits in your decision making. You'll become more confident, calm, compassionate and successful in the long run.

Understand yourself and those around you.

psychology

Psychology

books

Books

leadershipandmanagement

Leadership & Management

A Wall Street Journal bestseller, now in paperback. Poker champion turned decision strategist Annie Duke teaches you how to get comfortable with uncertainty and make better decisions. Even the best decision doesn't yield the best outcome every time. There's always an element of luck that you can't control, and there's always information hidden from view. So the key to long-term success (and avoiding worrying yourself to death) is to think in bets: How sure am I? What are the possible ways things could turn out? What decision has the highest odds of success? Did I land in the unlucky 10% on the strategy that works 90% of the time? Or is my success attributable to dumb luck rather than great decision making? Annie Duke, a former World Series of Poker champion turned consultant, draws on examples from business, sports, politics, and (of course) poker to share tools anyone can use to embrace uncertainty and make better decisions. For most people, it's difficult to say "I'm not sure" in a world that values and, even, rewards the appearance of certainty. But professional poker players are comfortable with the fact that great decisions don't always lead to great outcomes, and bad decisions don't always lead to bad outcomes. By shifting your thinking from a need for certainty to a goal of accurately assessing what you know and what you don't, you'll be less vulnerable to reactive emotions, knee-jerk biases, and destructive habits in your decision making. You'll become more confident, calm, compassionate, and successful in the long run.

Annie is the co-founder of The Alliance for Decision Education, a non-profit whose mission is to improve lives by empowering students through decision skills education. She is also a member of the National Board of After-School All-Stars and the Board of Directors of the Franklin Institute. In 2020, she joined the board of the Renew Democracy Initiative.

All Decisions Are Bets

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